Democratic leaders in the state Legislature on Wednesday proposed increased taxes and spending cuts as part of a plan to fix the state’s budget.

The plan may not pass muster with Gov. Arnold Schwarzenegger, though, who said Wednesday that he will veto the solution because it includes tax increases.

“None of that will fly with me because … it will be irresponsible, after the largest tax increase in California’s history just four months ago, to go back to the people and to say `We want to increase your taxes,’ ” Schwarzenegger said.

Democrats have proposed increasing taxes on cigarettes and oil production, repealing new corporate tax breaks, and placing a $15 annual fee on car registration to pay for state parks.

The proposal also includes spending cuts, revenue accelerations and accounting maneuvers, many similar to, but not as severe as, those proposed by the governor. These total approximately $20 billion toward filling the state’s $24 billion budget hole that has emerged since the 2009-10 budget was passed in February.

The cuts total $11 billion, but they do not result in the wholesale elimination of education and social welfare programs such as CalGrants, Healthy Families and CalWORKS, as proposed by the governor.

“We present a budget where everybody feels some pain, every part of the safety net takes a cut,” Senate President Pro Tem Darrell Steinberg, D-Sacramento, said Wednesday.

Schwarzenegger said he would veto any proposal that includes new taxes. His statement to reporters was echoed by Assemblyman Anthony Adams, R-Claremont.

Adams, who is facing a recall after supporting new taxes in February, said Democrats should be mindful that voters rejected an extension of those taxes in May.

“What part of `no new taxes’ didn’t they hear after the May ballots?” Adams said.

“It is incredibly apparent that voters rejected taxes, and we need to respect that, no matter how difficult that may be.”

Democrats say tax increases on oil and tobacco would produce about $2 billion – a small portion of the total budget gap – and are only needed to build the state’s emergency reserve to about $4 billion, as proposed by the governor.

They acknowledged it was very unlikely they would get the necessary support from Republicans to move the taxes forward, but they refused to make up the difference by eliminating social programs.

“You don’t build a rainy-day fund when it is raining, and right now it’s pouring,” said Sen. Ron Calderon, D-Montebello.

“If we were to build a reserve of $4.5 billion, we would be doing it on the backs of the people who need it most, and we refuse to do that.”

Democrats are planning to vote on their leaders’ proposal next Monday or Tuesday. If it fails to move forward, they would still have a few days to amend it before the end of the month – the date by which state Controller John Chiang has said a budget must be passed before the state risks running out of cash.

Steinberg and Assembly Speaker Karen Bass, D-Los Angeles, said the proposal will be voted on in pieces in one day.

Adams said he would be “highly motivated” to vote for cuts, but he wasn’t sure Republicans would help move forward a package that doesn’t produce the $4 billion reserve.

The proposal also would make $4.5 billion in cuts to education, about $700 million less than proposed by the governor; $2.8 billion in cuts to higher education, about $300 million less than Schwarzenegger proposed; and $2.6 billion in cuts to health and human services, about $3 billion less than the governor’s proposal.

The plan also includes suspending the requirement that students pass the California High School Exit Exam.

Bass said students shouldn’t be held to a standard that they are unprepared for because of decreased resources.

State superintendent Jack O’Connell called the proposed cut a “huge setback” that would result in minimal savings.

“The argument that our expectations should be lowered because of budget cuts to public education heaps insult on injury to students and teachers who are being impacted by the budget crisis,” he said in a statement released Tuesday evening.

The Democratic proposal does not include a 5 percent pay cut for state employees as proposed by the governor. Party leaders said state employees have already taken nearly a 10 percent pay cut through furloughs.

“It’s about shared pain, but it should also be fair,” Bass said.

Some accounting sleight-of- hand will save another $10 billion. Among the methods would be deferring the June 30 state employee paychecks to July 1 – the beginning of the next budget year.

“Those are not going to be the final sticking points,” Adams said.

“The major cuts that need to take place are going to be the heavy lifting of the budget; if we can close a half a billion here, half a billion there through accounting maneuvers, so be it.”

But the governor may not accept a solution that relies on a smaller reserve or one-time solutions.

“Another thing that is important is to solve the whole $24 billion problem and not to kick that can down the alley, which is a traditional thing that happens here in Sacramento,” Schwarzenegger said.